This is the ultimate question, isn’t it? Or maybe it’s “What IS your marketing budget?” Some businesses devote a percentage of sales to marketing, for example, 3%. This type of guideline is generally created by financial people who often see marketing as an expense, not an income-generator. When sales dip, marketing budgets also go down. That means at a time when marketing is needed most, these businesses can afford it the least!
We have clients who spend as much as 15 or 20% of their sales on marketing! Granted, these folks are very successful and have the cash to do this. We’ve also had clients who struggled each month to pay their bills. Obviously, their marketing budget is much smaller.
So … you have the classic chicken-and-egg situation. You need to spend money on marketing to increase your sales, but you need more sales to pay for more marketing!
Regardless of the size of your marketing budget, you need to be very smart about where you spend your time and money. The first step is to take a look at what you did in the past, and what results you got.
Too often we work with clients who have no idea where their marketing money went! They also don’t know how much new business (if any) they got from their marketing activities.
When evaluating any marketing activity, think about three things:
- Does this activity reach my Target Market? If a marketing activity doesn’t reach your target market, forget about doing it!
- What’s the total cost? Include any graphic design costs, travel costs, production costs, etc.
- What’s your anticipated Return on Investment (ROI)? This is the hard part. It’s often difficult to predict how many more sales or customers you’ll get from a new marketing activity. If you’ve done something similar in the past, your history should give you a good indication. If this is something new, you’ll have to make an educated guess.
Marketing is a process. Everyone, from the largest corporate giants to the smallest home-based businesses, finds the marketing puzzle both frustrating and exhilarating.
Successful people are very proactive with their marketing. They know their target market, they build a plan which appeals to that market, and they work their plan.
They also keep a close eye on RESULTS!
Successful people know that doing SOMETHING is better than doing NOTHING. They know that they can’t get results (good or bad) if they don’t do anything!
With the right tools, as you work your marketing strategy, you’ll be able to evaluate objectively and make improvements as time goes on. The advantage you have as an entrepreneur and small business owner? It’s easy for you implement new ideas! Ideas in large corporations and firms get stuck in committees. They fall victim to ego battles. They get put on hold until the boss gets back from vacation.
The good news is if you persevere and keep a close watch on the results of your marketing, your marketing strategy will work and your marketing dollars will be well spent! You’ll find you are attracting bigger, better, IDEAL clients, and your business is successful beyond your wildest dreams!